According to a Medtronic, Inc. news release, the company has reached an agreement in principle to settle a previously disclosed federal securities class action. Under the settlement, the company will make a payment of $85 million to resolve all of the class claims.
Under the settlement, Medtronic explicitly denies that it made any misrepresentations or omissions or that it otherwise engaged in any wrongdoing.
The action, initially filed in December, 2008 against the company and certain current and former officers by the Minneapolis Firefighters Relief Association, had sought damages for alleged misrepresentations and omissions by the Company during a period prior to November, 2008. These allegations relate to off-label promotion of Medtronic’s Infuse BMP bone substitute, the projections from which activity saw rises in the company’s share price.
According to the press release, the proposed settlement is subject to completion of final documentation and preliminary and final court approval. Medtronic expects to record the settlement as a one-time charge in its fourth fiscal quarter ending April 27, 2012.
What remains now is the apparently growing number of personal injury claims against the company, it being accused of fraudulently misrepresenting the risks associated with the Infuse device and of improperly promoting and marketing it, according to documents filed with the U.S. District Court for Southern Florida.
The rhBMP-2 (Bone Morphogenic Protein) implicitly embedded in the Infuse cage device allegedly caused ectopic bone growth that compressed nerves and required two revision surgeries in the case of Jennifer English as reported on our pages here, last September.
Source: Medtronic, Inc.